Wondering how your competition seems to have all the working capital financing they need and you don’t – the key to that answer might just be asset based lenders and the asset based lines of credit they offer to Canadian businesses such as yours.
Let’s examine how this relatively new and unique method of business financing can totally alter your business financing success.
The acronym for this type of financing is A B L; simply speaking its daily cash flow provide against your current, and sometimes now so current assets. What do we mean by that? Simply that this facility allows you to margin your receivables, inventory, and in most cases, should you choose, fixed assets and real estate. You are probably saying to yourself that you could arrange financing on your own re those fixed assets and real estate – but we are talking about using those assets as collateral for your daily revolving line of credit. So you aren’t borrowing, you are not bringing debt on to your balance sheet, you are just leveraging your ‘ assets ‘ (that’s the ‘A’ in ABL!) for daily cash flow and working capital.
And why are we claiming that this type of working capital financing just might be your key to business success. Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases you might have discovered its been a challenge to get business lines of credit of any manner.
So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate. The answer is simply that if your firm has a combination of 250k in working capital assets you are immediately eligible for asset based lines of credit. We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but that’s not our key focus for today’s information exchange.
So now you now the offering are out there. But why should you consider it. Simply because your firm might be in one of a number of special situations – that includes issues such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing to quickly for traditional Canadian chartered banking financing, etc! We are pretty sure you get the picture now!
The benefits to this type of business financing must by now be pretty obvious. It’s all about access to working capital financing and cash flow that you couldn’t access before. Assets that couldn’t be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.
Who are these asset based lenders, and what is the cost of this financing? We’ll leave that one for another day, but if you want to investigate asset based lines of credit for your firm ( remember, your competitor probably already has ) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.
You need the best investment guide you can find in this messed up economy and tough investment environment. You’ll also need a good guide to investing for beginners to navigate the rough waters ahead. Investing has never been more difficult or confusing. It’s time to learn how to invest, and here’s how to go about it.
First, you’ll need to get a handle on the investment universe including any investments you might already own. This is not that difficult if you have a good investment guide, since there are only 4 basic investment alternatives out there. Second, you’ll need to learn how to invest and put together a sound investment strategy that will work for you in both good times and bad. That’s what a good guide to investing for beginners can do for you.
In other words, learning how to invest successfully over the long term is a two step process. Skip step number one and you won’t understand step two. Without step two you won’t be able to put the investment knowledge you learned in step one into action. Up front I stated that now is a tough time to invest. Now I’ll back that up with my 35 years of investing experience, in terms of the 4 basic investment alternatives available to all investors. Consider this a mini investment guide and a wake up call. Investing for beginners is no picnic today.
Your 4 basic investment alternatives in order of safest to riskiest: safe investments, bonds, stocks, and alternative investments. Safe investments like bank accounts and money funds pay interest, and these days they don’t pay much. The score in late summer 2010: 1-yr. CDs at less than 1% and money funds at less than.05%, or one-twentieth of 1%. This is not normal, and is in fact downright scary. The government can hardly push rates lower to stimulate the economy as they’ve done in past years. We are already looking at zero interest rates in the money markets.
In order to earn higher interest income of 3% or more, average investors are moving money into bonds in the form of bond funds, which are not really safe investments. Simply put, when interest rates go UP, the value of bonds go DOWN. That’s a basic investment fact you can count on – interest rate risk. If you believe that interest rates will fluctuate as they always have and will go up in the not-too-distant future, bonds are not exactly great investment alternatives at this time. With two down and two to go, we move into the riskier choices that involve assuming the risk of ownership in order to earn higher returns.
Any guide to investing for beginners can point out that on average, over the long term, stocks have returned about 10% a year. The problem is that over the past 10 years the average investor would have done better with his or her money in safe investments in the bank. And over the past 3 years, a loss of about 10% a year was common for the stock funds that invest money for millions of average investors. Investor confidence in the economy and the stock market is not high, as billions of dollars are being pulled out of stock funds and moved someplace else (like to bond and money funds) in search of greater safety.
In the past when uncertainty was high and confidence in the stock market was low, smart investors turned to other (alternative) investments like real estate to find opportunity. That’s been a problem this time around, because the financial system seems unable to get the traction needed get things moving again. High unemployment won’t go away and millions of mortgages are “under water”, as people decide to just walk away from their financial obligations. Gold and silver have done well compared to other investment alternatives. If history is any guide to investing, that’s not exactly a cheerful note. People buy and hoard gold in times of fear and desperation.
Out of our 4 basic choices, none looks like a screaming BUY opportunity. Some of the best minds in the investment world are suggesting that investors need to start viewing the investing game differently and lower their expectations. I suggest that you start with the basics and curl up with a good investment guide on a rainy day. Then, you’ll want to follow up and learn how to invest with a guide to investing written for beginners. Once you start to get up to speed you might even begin to enjoy the challenge. And make no mistake about it… investing today is a challenge.
The best saving tips are the ones nobody ever tells you. Those money saving tips the big companies are hoping you don’t find out about so they can keep making boatloads of cash from you. We have all heard the normal saving tips: Pay your debts off, save for a rainy day, increase your income and reduce unnecessary expenses. Yes, these do work but you need better saving tips, saving tips the general public is never told. Saving tips you wish you knew, saving tips that actually increase your wealth.
So here they are:
Saving Tip #1:
Use the equity in your home loan to buy your car instead of signing that hire purchase or lease agreement. On average you will save R 20000 in 56 months. Yes, you heard me, don’t spend 1 cent more and save yourself R 20000. Pay the home loan back at the same premium as the vehicle instalment added to your existing repayment and you automatically save that money, not to mention the discount you can negotiate on the vehicle when you are paying cash!
Saving Tip #2:
Re-evaluate your insurances every year. I mean every year. Insurance companies do not lower your premiums, in fact they increase them annually, but intend on paying out less year on year due to the depreciated book value of your vehicle. Call a garage, get a book value and get your insurance company to adjust your cover value to match either the book value (if paid for) or the outstanding finance balance if under finance. Tell your insurance company to adjust that value and get an immediate reduction in your premiums.
Saving Tip #3:
Check your bank statement. Are you paying large penalty fees for drawing money at other bank’s ATMs? Drawing cash at your own bank’s ATM will drop your charges from R 30 to R3! Still writing out cheques at a huge cost? Switch to Internet banking and save yourself between 20% and 80% of your bank charges. You are probably paying for membership to a rewards programme too. Do you really get enough rewards for your membership fee? Most programmes actually favour the institution not the customer.
Saving Tip #4:
Does your cheque account pay you interest on your credit balance? Most don’t! Open a savings account and pay your salary into that or you sacrifice between 0,5% and 7% (available at CAPITEC Bank) interest on your positive balance by keeping it. A cheque account has no use if you do not write out cheques and Internet banking and debit cards make this a reality. Why are you losing money when you could be earning it? Even better is to switch to an account attached to your home loan (available at FNB), you could save thousands in interest over the term of you loan by a simple account switch.
Saving Tip #5:
Cut your electricity bill by up to 50%. Switch your geyser off everyday, the whole day (6am – 9pm) and shower in the morning. If you have timer, check it, most do not switch the geyser off for that long and during peak time you pay maximum demand. Check for “vampire electronics” and switch them off. Your pool pump only needs to run for 4 hours per day, change your timer setting. Check all your plugs everyday before you leave for work, you should draw NO power while you are not at home! You aren’t using it while you are not there, yet you are paying out your hard earned cash to keep that meter running. Don’t spend money on something that is not in use?
These tips are easy to follow and will make an impact on your bank balance. It is empowering to know you can and will be wealthier without spending an extra cent!
If you’re dedicated to saving money, you really can make a difference in the things you do every day. I’ve put together a list of 25 practical tips that my readers have personally sent in so that I can share them with others. They’re mums and dads, couples and singles, just like you, who have come up with some simple, yet effective everyday ways to save.
Make sure you read all the way to the bottom because there’s a real gem at the end.
- Google saves money. My husband’s Playstation3 was not working. First thought was to get it put in for repair. However a quick search of the internet for the error code that the machine was displaying and a solution was found, saving us $150 in technical service fees.
- I take a drink bottle to work and fill it up instead of buying drinks at lunch and also buy a loaf of bread, some cheese, salad etc at the start of the week and leave it in the fridge at work so I can always have whatever I feel like rather than going out to the store.
- I have undertaken some WEA courses including: home repairs, tiling and curtain making. The upfront investment has helped save my household thousands of dollars.
- Keep a tin/jar that can’t be opened easily and at the end of the day get all the family to throw in their loose pocket change. When it’s full the whole family decides how to spend it.
- I fill my petrol tank on Wednesday, use a voucher and then buy “that’s life” and “take 5” magazines. I end up spending about $1 for my mags on top of the price of the petrol as I get 8 cents off per litre for making purchases in store!
- Stock up on non perishable items that you know you have to use like toilet paper, tin food and toiletries when they are on sale.
- Read through all the junk mail catalogue to see where money can be saved ie today Foodland has it’s Whiskas cat food for.89 cents a tin compared to $1.06 at Coles. I normally purchase 40 tins at this price so I save!!!
- I re-use the plastic bags after I have purchased fruit/veg instead of buying more freezer bags
- Shop online for food to ensure you only buy the products you need, not the ones that look good at the time because you’re feeling hungry!
- Pay off your outstanding credit card balance every month to avoid paying interest fees. You’ll save heaps of money if you stick to this tip.
- Keep an empty milk carton and funnel on the side of sink and pour used water bottles into them. Then use this water on your pot plants or garden.
- Before you go shopping for clothes (especially underwear) make sure all your hand/washing is done and put away in cupboards. You probably don’t need any new items.
- Bank any overtime money… it’s money you don’t miss.
- Shop late in the afternoons as a lot of things get marked down at that time.Christmas eve after 4pm is particularly fabulous for bargains galore in the meat department you can fill your freezer for very little and it’s FUN.
- Avoid braking harshly approaching lights, start slowing down sooner (depends on traffic conditions as well) and you’ll save fuel and therefore money.
- My favourite tip – use the water that you boiled the vegies in to make the gravy. Then you don’t waste the nutrients left behind in the water and you don’t need to boil the kettle, so you save on energy.
- When shopping, break up shopping into $30 lots to get fuel vouchers – one for husband, one for yourself and one for your son.
- If you live alone or you’re just a couple, frozen vegies are a lot smarter option than buying heaps of fresh vegies that often don’t get fully used. While there will always be a place for fresh food, buying a whole broccoli for example is not always the best idea.
- Just bringing in my own lunch saved me about $10/day – $50 per working week x 52 weeks! I was able to take my then 10 year old away to the Gold Coast – a saving of $2600 which went towards air-fares and accommodation!
- Every time you receive a $5 note, stash it in a separate part of your wallet and save it. At the end of each day, remove all $5 notes from your wallet. Each time you reach $100, bank them into an account that is for a special purpose (ie, next holiday, buying christmas presents, saving for kids education etc).
- If you work in the city, park your car a little further out and walk to work. You not only save money on parking costs but you’ll get fit with an extra 30 minutes walking time, saving on your gym fees!
- Set your budget for the week and instead of using plastic, withdraw your cash and use separate money jars to keep all your cash. This will help you visually see how much you are spending and ensure you are not breaking the budget.
- I buy fresh cheap vegetables from the markets and blanch them, then snap them frozen, half the price of shop ones!
- Before you buy something spontaneously, walk away and ask yourself if you really need it. Chances are you don’t.
- The No.1 funniest Customer Money Saving Tip: hide your wife’s car keys!!!
How to save money should be something we all learn from a very young age, starting to save in your teenage years could set up you for life if done properly. It’s certainly a skill you will have for life once learned, here are my top 5 money saving tips for teens.
Tip 1 – Get a Job
If you haven’t already this would be my first tip. Getting a job just a few hours a week give you some extra money, how can you save money if your not making any?
Tip 2 – Set up two bank accounts
Bank accounts are generally free for under 18’s. You need to set up two, one that you have card access to and a separate account with a high interest rate. The high interest rate will make your money work harder for you. Make sure you don’t have card access to the second account, this will tempt you to spend your savings.
Tip 3 – Have your employer save for you!
Most employers would have no problem paying a percentage of your pay to a different account, 10% of your pay is a good place to start, you could also request a set amount if you prefer. I like the idea of 10% because the more you work the more you can save.
Tip 4 – Odd Jobs
If you have trouble finding a job ask family and friends if they have any odd jobs you can do, this might involve washing cars, mowing lawns, ironing clothes, cleaning out fridges or garages, dog walking. Get creative and make a list of all the jobs that you are willing to do and how much you want to charge, then get on the phone to aunts, uncles, grandparents, family friends and anyone else you can think of. I would not recommend door knocking, it can be dangerous to knock on doors of people you don’t know, you may also find that people you know are more likely to be regular customers, you would be surprised how much money you can make from this. Just make sure you save at least 10% of the money you make, maybe ask some of your customers to pay straight into your second bank account.
Tip 5 – Ask a parent
If you think that you are going to have trouble saving, ask a parent to open an account with you. Set it up so that it requires both of you to be present to make any withdrawals from this account. Your only young, it takes time to learn the discipline of saving, I find setting up your second bank account this way is a great tool to teach you how to save. Even if you ask your parent to do this for only 12 months, after then you should have saved a fair amount and that should be motivation enough to keep you saving.